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A problem solver, trusted adviser, rainmaker and storyteller for 20 years, has represented several of the world's most iconic brands, built businesses, opened international offices, created new brands, spoke about the power of branding at institutions including the Google Speaker Series, Duke, Kellogg and Wharton. Recently chosen to be the keynote speaker at Next Service Design in Berlin presenting how to accomplish service innovation. Has made appearances on major TV news networks, commentary in the global press, editorials in major business publications and a Contributor to Forbes.
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Are we being robbed blind? Whether you plan to worship the sun or can’t find the door without them, you’ll likely need to fork out over $350 for luxury eyewear – a price that’s framed through one lens of an $8.5 billion public company majestically shielded in the mountains of Italy. Eyewear was invented in Italy around 1284. Today more than 80% of major eyewear brands, including the world’s No. 1 seller, Ray-Ban, are designed and retailed (over 7,000 stores US alone) by Luxottica, raising questions about brand authenticity, price and customer choice.

Products exist in the mind and brands live in the heart: Luxury brands conjure up lifestyle interpretations we want to buy into. More than 500 million people don Luxottica’s products and CEO Andrea Guerra insists that “customers have the brand choice for their lifestyle,” and that it’s prevalent in their offering: “Luxottica has been able to deliver eyewear collections faster, enriched with more sophisticated decorations and innovative materials, to stores.” If you owned 80% of the high-end eyewear market and were doing what any CMO desires – achieving brand growth, relevance and revenue–you’d say that too, right?

That may be the “business” of brands, but if the product itself has had zero design input from the name on the frame, what of authenticity and brand promise? Recently the Economist quoted Rodney Collins, a director at advertising agency McCann, saying, “above all else brands must appear to be ‘authentic’ if they want to succeed.”

“Appear” is the crux of the issue: Authentic brands truly live and breathe their story; it’s reflected in their core purpose of who they are, what they stand for and why we believe. We trust their story because we experience it through the product and brand narrative. Many of us assume that it’s highly unlikely the name on the frame designed the product – teams of gifted designers design them, but Luxottica have their own designers translating their brand sense into successful eyewear designs.

Eyewear is a fashion purchase that doesn’t bust the bank. If consumers knew, however, would they feel that Luxottica had a monopoly? Their empire straddles house brands–Persol, Ray-Ban and Oakley–and licensed brands including Chanel,Prada and Versace. Given their premium pricing, are these brands presenting who they really are, what they really believe or stand for? If the customer identifies with a luxury lifestyle brand and connects with its values that guide her behaviors and standards, does that make it an authentic luxury brand? Perhaps the principles of luxury marketing can provide guides:

Luxury brands are elevated to a higher standard – that perception is paramount. Protecting it affords Luxottica a very strong margin, along with the ability to focus on flexibility and efficiency, delivering the products that will reflect positively into future shareholder value.

In luxury, less is more. Brand equity is preserved by controlling unit sales and by owning retail. Luxottica achieves that and simultaneously has decreased time to market for new designs by 44%; its revenues were up 15% this summer.

Brand equity is the metric. Luxottica has played a superlative role enhancing partner brands by extending their franchise into eyewear: a category that’s estimated to be nearly $2 billion in the US, according to ABC News.

Sub-luxury association with the brand dilutes brand equity–clearly making the case for Luxottica being a best-kept secret. As management guru Peter Drucker pointed out in his Power 5 theory, supplier power can deplete standout and competitiveness.

If it’s been done before, don’t do it. Like running a monopoly, but knowing and doing are two different things, and this category has clearly not been tough to have a monopoly on.

Detail is a key differentiator for authentic luxury brands and Luxottica has promised more sophisticated decorations and innovative materials.

Luxury brands are “seen” by the company they keep. If the public acknowledged that virtually all high-end eyewear is designed and manufactured by one firm it would likely destroy franchise value and erode the “authentic” brand message to consumers.

If these are the hallmarks of authentic luxury brands, theoretically Luxottica accomplished it with a determination, self-confidence and degree of success that deserves bright lights, but is the logo on the side enough?

CMOs know they’re tasked to build lasting relationships, so they must understand and deliver real value to empowered customers. People wear eyewear up to 14 hours a day, representing a tiny piece of terrific real estate for a brand to live! Especially luxury where the brand idea as opposed to the product is the foundation of perceived brand value. At its core, authenticity to most of us is about being legitimate: being true to who we are and our addiction to do what we do best. Alter that incorrectly or allow your rhetoric to step out of alignment with customers’ actual experiences, and you’ll end up in rude financial health.

Luxottica’s business model is clearly good for business– it’s booming, and so is the trend for luxury, reflected in Luxottica’s increased revenues ($4.8 billion by July). And the multitude of product designs is good for brands and in turn good for fashion-conscious consumers willing to pay the high-brow price. As for whether Luxottica’s business is good for the public’s interest, the court of public opinion should decide, if only they could see.

Follow me on Twitter @deancrutchfield, Facebook, or check out http://www.deancrutchfield.com for more actionable insights and tactics for becoming a successful brand – and to discover how you can deliver your best case and winning face to seize more, sell more and win more.

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… Dean, this is a great topic. The Italians are masters of this! For years, two huge Italian manufacturers (GFT and Marzotto) have produced substantially all of the volume/luxury branded goods in menswear, too (Calvin, Hugo, Joe, Valentino, Armani…). Consumers don’t care about authenticity; they only care about co-opting brand marketing budgets so they can use them to advertise themselves….

Hey Dean, a little late to the party here, but great analysis on Luxottica’s approach to controlling its stable of luxury eyewear brands, nonetheless. Really shines a new light on the “uniqueness” of these brands and the heritage with each.

One question I wanted to ask. Have you put any thought into how smaller, recently launched luxury eyewear brands (which are gaining traction by actually being unique, authentic, and value-driven at premium prices) are succeeding at collectively influencing and challenging these heavy hitters under Luxottica’s umbrella?

On the other hand, I can’t recall the last time I paid attention to the “story” behind the brand. The founding story is one thing but how can you make the case that the reason some guy started a company 15 years ago is the reason I buy completely unrelated items simply because they’ve got the same name plastered across the side. Take Nike for instance. The story about how the company was founded from this running coach making shoe soles in his waffle iron is great. It’s got no connection to why I might consider a shirt, or watch, or pair of sunglasses that say Nike on them. I buy those things because I like the fit of the shirt, the function/look of the watch, or the size of the glasses (I have a big head). I couldn’t care less about the “authenticity” of the brand.

Thank you Hofo for your POV. It’s different from what most customers of high end luxury brands expect. However there is a massive counterfeit market that doesn’t show any signs of abating. That trend concurs with your not needing authenticity so it’s a very relevant perspective. All my best, Dean

I would guess that even if 50% of the market for these items were aware of Luxottica’s existence and purpose, most of them still want to show off the high-end logos and the natural high price tag associated with such a logo, and therefore would still purchase.

The real threat to Luxottica is one of their luxury partners becoming wary of consumer sentiment towards Luxottica and awareness of it. Those companies, ever watchful over their brands and the luxury principles you mentioned, would likely take control of their own manufacturing and design of eye glasses. In fact, if enough knowledge of Luxottica exists to regular customers, it could even be a point of differentiation, which would cause a snowball of other brands to follow the leader.

I am torn on this issue. I enjoyed the designs of companies such as Dolce & Gabbana even before I heard about Luxottica, and nothing has really *changed* now, but it does feel like a sham that we are paying Dolce or Burberry to license its name out to a manufacturer and designer whilst having no input into the design itself. Unfortunately, Luxottica’s monopoly is so gigantic, almost all of the quality, attractive glasses are made by it. It’s like trying to boycott Google, for instance. Good luck with that. (note: I tried it.)

Having a difficult time deciphering your point here. Luxottica’s role, given its ownership/licensee model, is to be a steward of a house of brands, each with a distinct point of view (this is fashion, after all). There is no disputing that Ray Ban and Oakley have distinctly separate style and functional design that exemplify the brands and their respective lineages. Presumably, its Prada product looks like Prada, while Chanel looks like Chanel, and so on. While I’m not an expert on eyewear, it does seem that each brand has its distinctive values expressed, and that this means Luxottica’s role is definitely more than just “stamping a logo on a frame” and calling it a day.

Great in-depth look at the luxury brand definition. It’s crazy how Luxottica gets away with it and it totally sucks for the consumer. I’ve worn glasses since I was a kid, and this company sets up a monopoly so I have to pay more??? I suppose now I’m not longer talking about the luxury brands and referring to their ownership of lenscrafters, etc.